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Fitch Ratings: CMBS Defaults Could End Their Winning Streak Soon


This year could be the end of a five-year streak in declining CMBS defaults, as a maturing credit cycle pressures the market, according to Fitch Ratings.

2015 saw an uptick in defaults, up to $90.8B from $88.1B—but the cumulative default rate declined to 13% from 13.3%.

“New issuance volume has increased the study’s denominator at a faster pace than new defaults,” according to Fitch.

For 2016, S&P and Morgan Stanley have lowered their outlooks for CMBS issuances, with S&P cutting its estimate from $100B to $80B, GlobeSt reports.

And the looming CMBS “maturity wall” won’t help matters, as a large chunk of loans issued in the past decade are set to come due. [GS]